Electricity Prices Set To Increase Yet Again

In August 2011, energy giant Contact Energy was hit hard by the growing trend of household consumers switching to cheaper power companies after shopping around for a better deal. Of all New Zealand energy retailers, Contact Energy was one of the power companies who lost the most customers. Powershop and Just Energy gained the most new customers.

The NZX listed electricity retailer narrowly avoided a mass exodus of customers by introducing a 22% prompt payment discount to those customers using their accounts online.

However, Contact Energy has recently announced that their prices are to increase by up to 9 per cent in Blenheim, Taupo and Gisborne as of February this year.

A family of 4 in Blenheim using around 900kWh per month with one single electricity meter can expect an increase of approximately $200 per year on their household electricity bills.

The same sized family in Taupo will be paying and extra $140 per year an increase of 7 per cent on top of the current rates. Gisborne households will be paying around $150 more each year, an increase of 5 per cent on today’s market.

In March last year, the New Zealand government launched a campaign to encourage households to shop around for cheaper rates for their electricity in a bid to create a more competitive market. This resulted in record numbers of switches. The number of consumers switching to cheaper retailers is still extremely high despite the advertising finished some months ago.

Energy retailer comparison site Switchme.co.nz is expecting these numbers to continue rising with the recent announcement of the imminent price increase for Contact Energy customers in the regions mentioned above.

Consumers have become more aware of the extreme differences in power prices on offer throughout New Zealand and are now actively seeking to save money on household electricity.

For example, there is a difference of around $40 per month between the cheapest and most expensive plans available in Blenheim. This amounts to almost $500 per year for the average four person household!

With household out goings such as rent, groceries and electricity constantly on the increase, it makes sense to ensure you are getting the best deal.